#1 Letting Emotions Take the Wheel
The cryptocurrency market is a fun, potentially profitable place to invest your time and money. But it's also filled with emotions, like FOMO and FUD. Making decisions based on these emotions can lead to poor trading decisions. That's why you must keep your emotions in check. This guide will help you avoid letting your emotions dictate your trades.
Think about it this way: if you were driving a car, you wouldn't let your emotions take the wheel. You'd calculate the risk of making a fatal mistake. Similarly, investing in crypto is like gambling. It's a new asset class, and the prices have a high degree of volatility. By keeping your emotions in check, you can make smarter decisions and minimize your losses.
#2 Underestimating Technological Capabilities
If you're interested in day trading crypto, you'll need to develop a sound knowledge of the market's dynamics. To do so, you should study the underlying framework of prices, value, volume, liquidity, overbought/oversold zones, and standard deviation from the mean. Those basics are applicable to other cryptocurrencies, too, but you'll need to use them with some caution.
#3 Getting in Too Far Too Fast
One of the biggest mistakes to avoid when day trading cryptocurrency is getting in too fast. The cryptocurrency market is notoriously manipulated by whales. The first step to avoiding this mistake is to keep a macro-perspective. It is essential to identify patterns in the market and know your position relative to the whole.